Gold & XAU Poised to Benefit From Dollar Sell Signals; Revealing New Strength… XAU Weekly Trend Projects New Multi-Year Highs!
12/05/19 INSIIDE Track Update: “The Dollar Index has sold off sharply since retesting its rebound high and spiking slightly higher on Nov. 29. It has turned its daily trend down, increasing the likelihood that it is entering a larger-magnitude ‘c’ (or ‘3’) wave down.
Once again, the DXY (cash Dollar Index) is providing the clearest signals, continuing the sequence of the past 6 – 7 weeks. First, it closed below its weekly 21 Low MAC on Oct. 18 (for only the second time since April 2018). It repeated that on Nov. 1, while turning its weekly trend down (a lagging/confirming indicator).
That combination of bearish indicators signaled that a larger-magnitude decline was unfolding. However, it (paradoxically) also signaled that the initial sell-off was culminating, ushering in the time for a reactive multi-week bounce.
The Dollar entered that bounce and rallied back to its weekly 21 High MAC on Nov. 4 – 8, Nov. 11 – 15 and again on Nov. 25 – 29 – when its daily & weekly trend patterns generated decisive sell signals. Since then, it has plunged this week – turning both its daily and intra-month trends down, at the same time it was turning its daily 21 MAC down (two days after closing below that channel).
While recent action could spur a 2 – 3 day bounce, it sets the stage for a more damaging decline – lasting into late-Dec. That dovetails with the current rally of the inversely-correlated 21 MARC. Overall, that weekly 21 MARC will rally for 12 of the next 14 weeks.
The initial 4 – 5 weeks, from now until late-Dec., are the most noteworthy and reinforce a myriad of cycles converging in late-Dec…. and most likely to time the low of a substantial sell-off. The first couple weeks were poised to exert a positive influence but then steadily turn to neutral and then negative during the opening weeks of December. That is what is currently evolving…
Gold & Silver rallied to new rebound highs… this rally could still extend into Dec. 9 – 13 – the latest phase of ~7 & ~14 & the midpoint of the latest ~28-week cycle.
Corroborating that, the inversely-correlated daily 21 MARC will plunge for the next 5 days – providing the ideal time for the daily 21 MAC to turn up and spur a culminating rally. The Nov. 30 Weekly Re-Lay described what would be the optimum scenario for this week, following short-term buy signals on Nov. 26…
“If they are going to rally into Dec. 9 – 13, the ideal scenario would be to have Gold & Silver rally to their weekly LHR levels in the coming week (1482.5/GCG & 17.60/SIH), close at or below those levels on Dec. 6, and then spike higher & reverse lower on Dec. 9 – 13.”
That remains the preferred scenario, particularly for Gold.
The XAU remains in the most bullish position and has fulfilled the initial upside objectives from short-term buy signals on Nov. 12 & Nov. 26. However, it has not yet fulfilled the upside objective (xxx.xx/XAU) from its weekly trend signal in mid-Oct. So, more upside is likely in the coming days.”
Dollar sell signal projects drop into late-Dec. as Gold & XAU poised for new short-term surge into Dec. 12/13. Precious metals action reinforcing potential for ‘5th’ wave advance following the bottoming phase in Oct./Nov. ‘19. Intermediate cycles provide intriguing potential for early-Jan. 2020.
What is in Store for Gold in 1Q 2020?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.